Telecom hiring dips on cash crunch, Jio entry

Admin| Dec 16, 2016 - 10:46 PM
India

Hiring in India’s telecom industry has slumped by up to 40% in 2016 as carriers cut back on recruitments to conserve cash in the midst of a brutal price war unleashed by Reliance Jio Infocomm’s entry. Operators and recruiters say the sector will continue to be cautious on adding to the staff count over the next six months to a year to tide over severe financial stress.

The fall in hiring is complemented by a sharp drop in attrition as telcos optimally utilise existing staff for their core telecom business.

Any hiring is focused on marketing and sales at junior levels targeted towards adding or retaining subscribers, besides new areas of business, including digital payments and Internet of Things (IoT), say companies such as Vodafone India and Idea Cellular.

Consequently, increments for the year ending March 31, 2017 are set to be lower than last year’s average of around 9%, say experts. “There has been a 30-40% drop in hiring in 2016 compared to last year and we expect a similar trend for the next few quarters,” said Vivek Mehta, executive director for recruitment firm ABC Consultants.

The company recruits across levels for the telecom sector and has seen clients who are operators and device makers preferring to use internal job postings and transfers to outside hires.

“This is a volatile sector and there has been huge pressure on incumbents after Jio’s entry…we do not see this stress easing for at least another six months,” Mehta said.

Vinay Razdan, chief human resources officer at India’s No. 3 telco Idea, said after strong hiring in FY16 with primarily experienced talent, Jio’s entry has seen to it that “hiring may be moderate in FY17.” Vodafone India, the country’s second largest telco, said it will look to hire in areas like technology, business to business (B2B) and digital segments. “As our business evolves, new skill sets in areas of digital, IoT, big data etc will be of increasing interest for us,” the comapy said.

However, Airtel said it has added employees across all segments and verticals in 2016 so far, including fresh graduates. "Also, as we expand Airtel Payments Bank operations nationally, we will look at adding talent in various domains," said its spokesperson.

SECTOR UNDER STRESS

“In times of legal consolidation in the telecom industry and the existing aggressive competition, telcos would optimise costs and rationalise payrolls to keep costs minimum. Hiring, thus, would be highly selective and limited in long term service areas due to pressure,” Hemant Joshi, telecom lead analyst, Deloitte, said.

Another recruiter mentions that during his interaction with one of the top two telecom providers he was told their attrition was around 14% compared to 23% last year in the middle management.

“The drop was because high retention measures and a hiring pause on roles unless very critical. The client said they were practicing resource utilisation and areas that needed 10 employees were being done by 6 employees,” said the recruiter who did not wish to be named.

And all this will impact increments coming up in 2017. “In the last two years, the telecom sector had seen a raise on an average of 9-9.5%. This year it is going to be lower than that,” said Anandorup Ghose, partner Aon Hewitt India.

He added the ramping up happened when Jio entered market and now the players need to work towards their operations.